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Home Depot plans to keep most of its prices stable, despite President Donald Trump’s tariffs driving costs up. But tariffs may cause Home Depot to increase prices on select items and eliminate some product lines entirely.
“We don’t see broad based price increases for our customers at all going forward,” Home Depot executive Billy Bastek said on an earnings call with analysts Tuesday. “There are items that we have that could potentially be impacted from a tariff that, candidly, we won’t have going forward.”
Home Depot said it has diversified where it sources its merchandise and reduced its reliance on China. More than half of Home Depot’s products come from the United States. The company is betting that holding prices down will help it gain market share against competitors, Bastek said.
But the trade war has begun to hurt Home Depot. Consumer sentiment has plunged near record lows as Americans fear tariffs will reignite inflation and weaken the economy. That, in part, kept some customers away from the home improvement behemoth.
Home Depot reported sluggish earnings, weighed down by a weak housing market and consumers taking on fewer large-scale renovation projects. Sales at US stores open for at least one year increased 0.2% last quarter.
Holding prices steady
A wave of companies have announced price hikes because of the added costs of tariffs.
Many of Home Depot’s competitors and suppliers have been raising prices to mitigate cost increases from the 10% universal tariffs on every product entering the United States and higher levies on Chinese goods. Washington and Beijing reached an agreement to lower those tariffs last week, but the United States still charges a 30% levy on most goods coming from China.
Home Depot has also caught a break so far on lumber tariffs, a major part of its business. But that could change soon. About 30% of the softwood lumber consumed in the US is imported, with Canada accounting for north of 80% of those imports. Lumber is expected to soon face a tariff hike.
In April, Stanley Black & Decker, the owner of Dewalt, Craftsman, Black + Decker and other power tool brands, raised prices by an average of high single-digits because of tariffs. It plans to introduce a second round of increases later in the year, the company said on an earnings call.
Walmart said Trump’s tariffs are “too high” and it will raise prices on some items as Trump’s global trade war increases the company’s costs.
“We will do our best to keep our prices as low as possible. But given the magnitude of the tariffs, even at the reduced levels announced this week, we aren’t able to absorb all the pressure given the reality of narrow retail margins,” Walmart CEO Doug McMillon said last week on an earnings call.